Memorandum by the Local Government Information
Unit (AC 02)
The Local Government Information Unit (LGIU)
is an independent research and information organisation supported
by more than 150 councils and the local government trade unions.
1. INTRODUCTION
1.1 The LGIU shares the concern felt by
a large number of local authorities and other public bodies about
the plethora of audit and inspections being undertaken by an increasing
number of inspectorates. The Audit Commission is a central player
in this and its role is about to expand because of the responsibilities
it will assume under the best value regime.
1.2 Whilst we acknowledge that the Audit
Commission will continue to have wider responsibilities, it is
on its role in relation to best value that we wish to concentrate
our remarks.
1.3 We have grouped these remarks under
the following three headings:
(i) the purpose of inspection;
(ii) the approach of the Audit Commission
to the inspection process;
(iii) resourcing inspections.
2. THE PURPOSE
OF INSPECTION
2.1 Though they build on the existing work
of the Audit Commission in many ways, the audit and inspection
arrangements under best value are new for all concerned. This
was acknowledged in the government's White Paper "Modern
Local Government—in touch with the people" which saw
such arrangements as necessary in order to give "a clear
view of whether best value is being obtained."
2.2 In our view, the nature of the duty
on local authorities means that there will always be several views
about whether best value is being obtained. There are a number
of prescribed elements to which authorities will have to conform
but, by and large, to use the catch phrase, "what matters
is what works." Central government has, quite rightly, emphasised
that this is about what matters for local communities.
2.3 The White Paper however also foresaw
further roles for inspection, namely: providing a "rigorous"
check on the information authorities provide in their local performance
plans and on the management systems that underpin them; supporting
the government's intention to "establish high standards of
probity in local government" and to "restore local accountability"
(as the White Paper would have it); and to provide the foundation
upon which "decisive action" would be taken in the event
of an authority failing to act when its performance fell short.
2.4 These strictures are now incorporated
into the legislation on best value (the Local Government Act 1999)
and its associated regulations and guidance. We consider that
there is a danger that the role of inspection might become so
central that it distracts from the primary duty of best value,
the duty that is owed to local people. Particularly if inspection
becomes the arbiter of whether best value has been achieved, authorities
might be in danger of losing the focus on the things that matter
to the communities they serve.
2.5 The focus of an inspection therefore
needs to relate clearly to the best value objectives. The Audit
Commission, as well as local authorities and central government,
will need to be clear about whether inspections are aimed at examining
the state of a service and the likelihood that it will improve
or decline over time, or whether the thing that is being inspected
is the rigour of the best value review process itself. In our
view, if inspection is not to usurp the role of local people in
determining best value, the Audit Commission should concentrate
on understanding the approach taken by the authority and testing
the rigour of their arrangements to support it. The experience
of the field trials carried out by the Audit Commission earlier
this year seems to be that the focus of the inspection veered
between the two. It is likely that, over time, the process will
become seamless but in the meantime we are concerned that what
inspectors might be doing amounts in fact to a re-review of a
service.
2.6 We have submitted comments to the DETR
on the draft guidance on best value reviews in which we welcomed
the fact that the government acknowledged that authorities would
need to take a long term perspective in carrying out reviews.
We also argued that it needs to be acknowledged that such a long
term perspective might also require a long term solution as opposed
to immediate, short term change. The Audit Commission, in inspecting
an authority, will also need to understand the approach the authority
is taking and perhaps recognise that all the solutions might not
be immediately in place.
3. THE APPROACH
OF THE
AUDIT COMMISSION
TO THE
INSPECTION PROCESS
3.1 The different purposes that inspection
serves also has a bearing on the approach that the Audit Commission
adopts. We consider it important that it upholds its independence,
particularly from central government who might have priorities
for local government which differ from those enunciated by local
communities. It is equally important however that it should not
perceive its independence as amounting to a role of final arbiter
of what constitutes best value.
3.2 The inspection reports produced by the
Audit Commission will be made publicly available and it is crucial
therefore that there should be no surprises for an authority when
it is published. We welcome the fact that the Audit Commission
is committing itself to the idea that it will produce an "interim
challenge", setting out and sharing with the authority the
conclusions it has reached on how thorough the authority has been
in reviewing its service and the actions it is taking to secure
improvements.
3.3 In our view, however, a number of authorities
will be looking for advice and guidance before the inspection
stage about the actions they are proposing to take. This will
have increasing relevance in the context of best value where innovative
solutions are on the one hand being encouraged but also where
failure can bring penalties of one kind or another. The Improvement
and Development Agency (IdeA) will be able to offer assistance
in this regard but it is also necessary for the Audit Commission
to recognise that it will have to acknowledge where such assistance
has been given and not simply defer its judgement until the formal
inspection takes place.
3.4 The Audit Commission should, in our
view, be able to offer advice as well as pass judgement, but it
should also be aware of the other sources of advice that authorities
might turn to, such as the IdeA.
3.5 Most authorities, including those who
have been formally piloting best value, are finding its processes
challenging. The nature of the review process, the way in which
it needs to transform ongoing performance management arrangements,
and the depth of testing which will be required are leaving authorities
with no alternative but to learn as they go along, re-examining
and improving their processes over time.
3.6 The Audit Commission will need to understand
that the changes to culture and awareness within authorities that
best value requires will not necessarily be embedded by April
2000 when the duty of best value comes into force, nor indeed
perhaps for some time after that.
4. RESOURCING
INSPECTIONS
4.1 The direct cost of inspection and the
resources that will have to be committed to facilitating them
are a matter of concern to most authorities. There appears to
be no concrete indication of what the long term implications are
likely to be. The government has said that, for the average authority,
receiving the average amount of inspection, the cost will be neutral
given the funding provided by government. This leaves many authorities
wondering how average they in fact are.
4.2 One of the issues affecting the amount
of inspection an authority receives is how the Audit Commission
treats services which an authority has split up for the purposes
of review. At the moment there appear to be conflicting messages
about whether this will result in an increased number of inspections
for those authorities that take this approach. It seems to us
that splitting services is a likely consequence of an authority
adopting the "cross-cutting" approach to service review
that the government wishes to see happening as a result of best
value. It would be an unfortunate outcome if the Audit Commission's
preferred method of inspection ended up deterring authorities
from pursuing this more innovative approach to best value for
fear of the increased inspection burden it might bring.
4.3 We are aware that the Audit Commission,
in the light of its field trials, hopes to reduce the impact of
inspections in terms of the time and resources that they will
entail, though not of course their rigour. If nothing else, the
Audit Commission will have to be aware that in order for an authority
to provide the level of assistance that appears to be required,
sufficient notice of an inspection will have to be given. This
assistance ranges from arranging meetings with a range of councillors
and staff as well as representatives of service users, through
to providing secure accommodation and facilities, and providing
documents and other information.
4.4 It is also a matter of great concern
to authorities that scarce resources may have to be diverted from
front-line service delivery in order to meet the requirements
of inspection.
5. CONCLUSION
5.1 We do not take issue with the fact that
inspection is an integral part of the best value regime. We believe
however that the Audit Commission will need to approach its role
with tact and discretion, in the early years at least, until it
has more evidence of how well it can trust local authorities.
5.2 We welcome the opportunity of raising
the above issues with the Sub-committee and would be pleased to
elaborate them further should the Sub-committee wish.
LGIU
December 1999
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